GST Compensation Instalment

·      Govt Releases Rs. 6000 crs to States to Meet GST Compensation Shortfall

·      7th Instalment of Rs.6,000 crore Released to the States as Back to Back Loan to Meet the GST Compensation Shortfall

·      A Total amount of Rs.42,000 crore Released so far to all States and UTs with Legislation

·      This is in Addition to Additional Borrowing Permission of Rs.1,06,830 Granted to the States

[MoF Press Release/14.12.2020]

The Ministry of Finance has released the 7th weekly instalment of Rs.6,000 crore to the States to meet the GST compensation shortfall. Out of this, an amount of Rs.5,516.60 crore has been released to 23 States and an amount of Rs.483.40 crore has been released to the 3 Union Territories (UT) with Legislative Assembly (Delhi, Jammu & Kashmir & Puducherry) who are members of the GST Council. The remaining 5 States, Arunachal Pradesh, Manipur, Mizoram, Nagaland and Sikkim do not have a gap in revenue on account of GST implementation.

The Government of India had set up a special borrowing window in October, 2020 to meet the estimated shortfall of Rs.1.10 Lakh crore in revenue arising on account of implementation of GST. The borrwoings are being done through this window by the Government of India on behalf of the States and UTs.  The borrowings have been done in 7 rounds. The amount borrowed so far was released to the States on 23rd October, 2020, 2nd November, 2020, 9th November, 2020, 23rd November, 2020, 1st December, 2020, 7th December, 2020 and 14th December, 2020.

The amount released this week was the 7th instalment of such funds provided to the States. The amount has been borrowed this week at an interest rate of 5.1348%.  So far, an amount of Rs.42,000 crore has been borrowed by the Central Government through the special borrowing window at an average interest rate of 4.7712%.

In addition to providing funds through the special borrowing window to meet the shortfall in revenue on account of GST implementation, the Government of India has also granted additional borrowing permission equivalent to 0.50 % of Gross States Domestic Product (GSDP) to the states choosing Option-I to meet GST compensation shortfall to help them in mobilising additional financial resources. All the States have been given their preference for Option-I. Permission for borrowing the entire additional amount of Rs.1,06,830 crore (0.50 % of GSDP) has been granted to 28 States under this provision.

The amount of additional borrowing permission granted to 28 States and the amount of funds raised through special window and released to the States and Union Territories so far is annexed.

State wise additional borrowing of 0.50 percent of GSDP allowed and amount of funds raised through special window passed on to the States/UTs till 14.12.2020

(Rs. in Crore)

S. No.

Name of State / UT

Additional borrowing of 0.50 percent allowed to States

Amount of fund raised through special window passed on to the States/ UTs

1

Andhra Pradesh

5051

1055.79

2

Arunachal Pradesh*

143

0.00

3

Assam

1869

454.36

4

Bihar

3231

1783.74

5

Chhattisgarh

1792

338.52

6

Goa

446

383.66

7

Gujarat

8704

4212.94

8

Haryana

4293

1988.26

9

Himachal Pradesh

877

784.43

10

Jharkhand

1765

183.90

11

Karnataka

9018

5668.31

12

Kerala

4,522

956.04

13

Madhya Pradesh

4746

2075.07

14

Maharashtra

15394

5472.11

15

Manipur*

151

0.00

16

Meghalaya

194

51.09

17

Mizoram*

132

0.00

18

Nagaland*

157

0.00

19

Odisha

2858

1746.13

20

Punjab

3033

1385.96

21

Rajasthan

5462

1408.42

22

Sikkim*

156

0.00

23

Tamil Nadu

9627

2851.46

24

Telangana

5017

559.02

25

Tripura

297

103.50

26

Uttar Pradesh

9703

2744.29

27

Uttarakhand

1405

1058.28

28

West Bengal

6787

734.68

 

Total (A):

106830

37999.96

1

Delhi

Not applicable

2679.39

2

Jammu & Kashmir

Not applicable

1037.91

3

Puducherry

Not applicable

282.74

 

Total (B):

Not applicable

4000.04

 

Grand Total (A+B)

106830

42000.00

* These States have ‘NIL’ GST compensation gap